I admire Mr.Warren Buffett as much for the hell a lot of Money that he possesses as much for the simplicity of his thoughts. He is a man of Wit and humor and he is known for his one-liners. They possess a great message for the layman investor. Let us look at some of them and try to decipher the mind that earned billions many times over (in the faint hope that even if we get to earn 0.0000001% of what he earned it would make a difference to our life)
‘Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.’
This is the message that Warren Buffett strives to emphasis over and over again.Most people do not invest in stock market. They just trade in the Stock Market. Unlike other modes of investment such as Debt Funds, Bank FDs or Real estate people do not have the patience in holding the stock. The moment they buy the stock, mostly based on the suggestion from the stock broker, they start monitoring the price. So called “Stock Investors” let the stock market to decide when they want to buy or sell the stock. This is terribly wrong as “Mr.Market” (to use Benjamin Graham’s characterization of Stock Market) is subjected to wild mood swings and does not behave rationally everyday.
According to Buffett, Your buy/hold/sell decision should be based on the company’s performance over a long-term & the management that governs it. If you are convinced of the Company’s performance & its Management Team you should in fact buy more of the shares in that company even though the price may be languishing at a bottom currently. By this way you are adding more value to your assets at throw away price.
So the message is Stock Investments are for a long-term where in you don’t trade in Stocks but Invest in it. Longer you stay invested the more the value you get out of it.
‘Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.’
This is the message that Warren Buffett strives to emphasis over and over again.Most people do not invest in stock market. They just trade in the Stock Market. Unlike other modes of investment such as Debt Funds, Bank FDs or Real estate people do not have the patience in holding the stock. The moment they buy the stock, mostly based on the suggestion from the stock broker, they start monitoring the price. So called “Stock Investors” let the stock market to decide when they want to buy or sell the stock. This is terribly wrong as “Mr.Market” (to use Benjamin Graham’s characterization of Stock Market) is subjected to wild mood swings and does not behave rationally everyday.
According to Buffett, Your buy/hold/sell decision should be based on the company’s performance over a long-term & the management that governs it. If you are convinced of the Company’s performance & its Management Team you should in fact buy more of the shares in that company even though the price may be languishing at a bottom currently. By this way you are adding more value to your assets at throw away price.
So the message is Stock Investments are for a long-term where in you don’t trade in Stocks but Invest in it. Longer you stay invested the more the value you get out of it.
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